By Olivia Le Poidevin

GENEVA (Reuters) -Global economic growth could slow to 2.3% as trade tensions and uncertainty drive a recessionary trend, the UN Trade and Development (UNCTAD) agency said on Wednesday.

"Global growth is projected to slow to 2.3% in 2025, placing the world economy on a recessionary path," UNCTAD said, citing a report it published on the trade and development outlook for this year.

The global economy grew 2.8% in 2024, it said.

"This is a significant deceleration compared to the average annual growth rates registered in the pre-pandemic period, which itself was a period of subdued growth globally," the report said.

Trade uncertainties have rocked financial markets this month after U.S. President Donald Trump announced sweeping tariffs on many countries on April 2. Trump unexpectedly paused the higher duties on a dozen economies days later, but slapped even stiffer levies of 145% on China.

UNCTAD said fears of recession in the U.S. were growing as tariff concerns added to investor anxiety.

"The implementation of successive rounds of restrictive trade measures and geo-economic confrontation carry the risks of severe disruptions to border-crossing production lines and international trade flows, in turn pulling down economic activity globally," the report stated.

The global outlook for 2025 is marked by the highest level of policy uncertainty seen this century, causing companies to suffer losses and delay investment and hiring, the report added.

The U.N agency had urged Trump's administration on Monday to exclude the poorest and smallest economies from reciprocal tariffs because it "would have minimal impact on United States trade policy objectives."